China’s biggest property developers are struggling to sell homes despite the introduction of some relaxation measures by Beijing. The value of the combined contracted sales at the country’s top 100 developers fell 47.2 per cent in February from last year to 401.6 billion yuan (US$63.6 billion), widening from a slump of 41 per cent in January, according to China Real Estate Information Corporation (CRIC), which compiles industry data. Contracted sales or presales, which account for about 90 per cent of new home sales, are the primary cash stream for China’s home builders. Analysts said more easing was on the cards. “Given the importance of China’s property sector to its gross domestic product and jobs market, we expect policymakers will have more supportive measures to reverse the very weak sales trend,” said Raymond Cheng, managing director of CGS-CIMB Securities. Four Hong Kong banks set aside US$1.02 billion for China property risks China’s US$1.7 trillion housing market has been under pressure since mid last year, when China Evergrande Group, the country’s biggest home builder, started to default on debts owed to suppliers, contractors and those who had bought its high-yield wealth management products. The central government has rolled out some easing measures, including lower mortgage rates and faster home loan procedures, to help improve sentiment. Vanke calls on staff to help it survive China’s property slump Some signs of a recovery were visible towards the end of February, after some relief measures were extended to the sector. For instance, weekly sales in 25 major cities tracked by CRIC declined 31 per cent in the week beginning on February 21, narrowing from a 39 per cent drop in the last week of January. “We believe this is partially driven by improving homebuyer sentiment amid incremental policy easing,” said Stephen Cheung, an analyst with US investment bank Jefferies. On February 18, Heze became the first city in China’s northern Shandong province to introduce easing measures, with four major banks lowering the minimum deposits for home purchases to 20 per cent from 30 per cent. Within the next two weeks, eight more cities, including Nantong in the eastern Jiangsu province, Greater Bay Area city Foshan and Chongqing, one of four centrally administered municipalities in the country, lowered their down payment requirements. No respite for Chinese developers as home sales continue plunge in January A gradual recovery in the volume of contracted sales could start in March, said CGS-CIMB Securities’ Cheng. This month could yield a sales increase compared to February. “We expect many more local governments, especially in low-tier cities, will join and relax their housing policies, for example, their first-home down payment ratio, in the next few months, and that [the central government] will postpone its property tax pilot programme in the upcoming ‘ two sessions ’,” Cheung added.